A market for copper is producing at a quantity where the marginal social cost exceeds the marginal private cost due to environmental pollution. Which of the following classifications best describes the situation and its implications for societal welfare?

In this situation, we have a market for copper where the costs to society from environmental pollution are higher than the costs that producers consider when making their decisions. This means that the marginal social cost, which includes the harm to the environment, is greater than the marginal private cost that producers pay. As a result, the market is producing more copper than is socially optimal, leading to a deadweight loss, which is the loss of economic efficiency when the equilibrium outcome is not achievable or not achieved. For example, if a copper producer ignores the pollution they create, they might produce too much copper, harming the environment and reducing overall societal welfare. This misalignment of costs means that society ends up worse off because the true costs of production are not reflected in the market price.